8 November 2018
You would think that in a world as vast as the shipping industry—a machine with no shortage of moving parts—that standardization would be a facet of its sustainability. In a way that’s correct and in another it’s not. While little in the industry can be considered standardized, the taxonomy of certain types of cargo can.
Being that different types of cargo impose varying degrees of difficulty for the transportation and shipping process, it is no surprise that the industry agrees upon ubiquitous definitions of said cargo and works to create consistent price points for the shipment cost of the shipping method used. We’re used to distinct price points. We know the difference between a Honda Civic and a Ferrari, or filet mignon and McDonald’s. And deep down, we know how much we expect to pay for a given good or commodity, with wiggle room dependent on the quality and place of purchase.
The freighting industry isn’t too different. We’ll explain.
Freight classes explained
Freight classes can go by a few names. From freight classifications, freight codes, freight categories, NMFC classifications, and more, there is no shortage of ways to describe freight class. But if you’ve landed here it could be that you have no idea what a freight class is and you would like to know. In which case:
A freight class is a specific code given to freight that dictates how difficult and costly it is to ship. It is an umbrella that covers multiple different types of goods and commodities beneath its ‘rating’ and clumps them into one price point. This code is then used by intermediaries, carriers, shippers, and any entity in the shipping industry as a reference.
You know that a gallon of milk from the store should cost you around $5, right? Well, carriers know that shipping ping pong balls is just about as expensive as it gets. By referring to these freight classes, the category allots a ballpark understanding of what it will take and cost to move the shipment from point A to point B.
Who dictates freight classes?
The NMFTA (National Motor Freight Traffic Association) is the organization that sets forth and standardized freight classes. It is their 18 classes which range from 50-500 that are regarded as law, adhered to, and still used today. While there are other classifications for certain types of cargo (think hazardous materials or LTL shipping), it is their codes that are entered into a bill of lading.
It is rare to hear of classifications outside of the NMFTA’s NMFC (national motor freight classification). The freight chart that explains the parameters of each classification can be purchased directly from their association. It is this exact chart that the industry references.
Freight classes, how important are they?
The reality is that freight classes, having become the standard of the industry, are now regarded as law. This, respectively, renders them to be extremely important. As we mentioned previously, the point of freight classifications is to create consistency in pricing but also to gauge risk and volume of work. By this alone, one can assume that they are quite important.
However, what makes them even more so is the cost involved. Imagine this: you are a new company that is just starting out in the shipping industry and you need to move your goods from point A to point B. You evaluate your cargo and decide that you fall beneath a certain classification. This is then communicated to your freight forwarder, broker, or whoever is acting as your liaison, and they then relay the information to the carrier.
A quote is then generated based on this classification, which sets a price point in parallel to the destination, type of shipping, and amount of goods or commodities shipped. This price point then becomes your base and influences your future deals with a given company.
Now, what if whoever oversaw your freight (internally) did not take freight classes seriously and, instead of doing the proper research, assigned your cargo to the wrong class? This would mean that the wrong classification was entered into the bill of lading, resulting in an overcharge of services since the beginning of the contract. This could be in the thousands of dollars.
The other issue that could occur is your freight class could be entered incorrectly as a code that is less expensive. Once this error has been identified, the carrier can rectify the situation by demanding compensation to cover the difference of what your freight should have originally costed.
What this means is that, somewhere in the future, if this error is discovered, you will have to pay a hefty sum to cover the difference of the initial contract. In both situations, note how imperative it is to ensure your classification is accurate and that you understand the importance of the NMFTA’s codes. These are industry standards.
How are they calculated?
Freight classifications are calculated based on four distinct factors. While terminology can fluctuate depending on the company you are in business with, the NMFTA basically breaks it down like this: physicality, liability, storability, and handling. By assessing and evaluating each of these characteristics, a freight class is then assigned for a given cargo.
However, as a shipper, it is important that you adhered to NMFTA’s standard, as you will have to use their parameters to identify which class your cargo fits in.
The physicality of the shipment is broken into three categories; density, value, and dimension. In this case, density will always be calculated in cubic feet and weight will always be measured in pounds. Density, of course, is the total weight divided by the volume of your cargo. This is arguably the factor that most influences the pricing.
Take class 500, for example (we’ll explain more later), the most expensive freight classification that has commodities like ping pong balls under its umbrella. This is partly due to ping pong balls being hollow and voluminous. Much of the truck is going to have to be filled with pallets or packaging that supports, what in NMFTA’s terms, is very little.
This one should be obvious. Goods and products store differently. Leave a book inside a truck for a week and it’s fine. Leave fruit and it could rot. One of the factors that contributes to the calculation is storability, as this will indicate how difficult to keep the goods or products healthy will be.
Next, what sort of problems can arise? Are the contents flammable? Hazardous? Combustible? What about the type of packaging they come in—are they easy to stack? Does the truck need to be temperature controlled? Will your cargo spoil if not properly attended to?
Another factor that contributes to the freight classes and their assignment is handling. How easy or difficult is it to handle the cargo? The questions that follow can be similar to these: is machinery required to move the contents? Is it dangerous to handle? Does there need to be someone specialized in the type of materials? Is it fragile or durable?
The handleability of your specific cargo will directly influence your freight classification, thus influencing the total price of your shipment. The easier it is to handle a given cargo, the ‘better’ your freight code.
Lastly, risk is a massive component to calculating a freight class. What we speak of here is liability. Regarding a certain good or product, what sort of concerns are posed for the carrier? With all factors considered, will transporting this product or good pose major risks for both parties, or is it a generally safe and secure type of cargo to ship?
With liability in mind, the standardization process then identifies (as a whole) certain types of products or goods that are, by their very nature, a risk to ship or not. Of course, there are always going to be risks—it is shipping we’re discussing here—but many will be dramatically less than others.
Top 10 freight classes explained
Now that you have the gist of the NMFTA’s freight classes, let’s take a look at what exactly the top ten freight classes look like. What are some of the materials that fall into these categories? Are they all relatively similar? Below we’ll explain the top 10 freight classifications from least to greatest.
The weight per cubic foot of class 100 is 9-10.5 pounds.
Within this classification, you’ll find items like wine and beer (in cases), covers for boats and cars, towels, rugs, and all things alike
The weight per cubic foot of class 110 is 8-9 pounds
Classification 110 contains large frames, including framed artwork, cabinets, and tools for both construction and the homestead
The weight per cubic foot of class 124 is 7-8 pounds
This classification is home to appliances. Everything from toasters to refrigerators.
The weight per cubic foot of class 150 is 6-7 pounds
Here you’ll find sheet metal, large automobile parts, and big pieces of furniture like bookcases or dressers
The weight per cubic foot of class 175 is 5-6 pounds
Couches, extra-large furniture (think big tables), and clothing racks are some of the items that make up class 175, as made apparent by the weight per cubic foot
The weight per cubic foot of class 200 is 4-5 pounds
Again, we have larger storage for sheet metal, automobile and aircraft parts, mass shipments of aluminum, bed frames, mattresses, and the like
The weight per cubic foot of class 250 is 3-4 pounds
Again, we have more mattresses, box springs, large TVs and electronics, monitors, and more
The weight per cubic foot of class 300 is 2-3 pounds
A variety of heavy and cumbersome furniture, more cabinetry, and some appliances
The weight per cubic foot of class 400 is 1-2 pounds
This is where it starts becoming noticeably expensive. Deer antlers are one of the items that fall into class 400, as they’re very difficult to store, niche, and cumbersome
The weight per cubic foot of class 500 is less than one pound
As aforementioned, Class 500 is host to ping pong balls and by far the most expensive NMFTA classification
Density is king
If you are currently trying to identify what your freight class is, know you will often first be asked about your density. The density allows professionals to estimate your class, being that it’s an exact measurement. Still, it is important to note that the other three factors will still play a role.
Do not make the mistake of thinking density overrules the other facets of freight classification calculation, as this will often result in a company using the incorrect classification.
Find professional help
While it is within your realm of capabilities as a shipper to evaluate and assess your own freight classification, we highly advise you to seek professional help. A freight broker, advancer, 3pl, or the likes of will be able to evaluate your specific shipment and ensure that you are assigning the correct classification.
They can also ensure that whoever you have decided to work with, if you do not have a liaison, has included the correct freight class within the bill of lading. If anything, hiring someone as a consultant simply to sign off on your process can be the difference between a larger and smaller profit margin.
Freight classifications are the anchors of the industry. They keep pricing consistent and allow both carriers and shippers to gauge the difficulty of a given shipment and price it accordingly. Without these standards, the costs of shipping would vary drastically from one company to the next.
Understanding freight classes is vitally important to both the shipper, carrier, and any agent within the industry. We hope this explanation helped you understand freight classifications and the way they dictate pricing.